After much deliberations, the world?s second-largest apparel retailer, Hennes & Mauritz AB (H&M), on Thursday submitted a proposal through its legal firm Titus & Co for entering the Indian market through 100% FDI in single-brand retail trading. The H&M proposal is the second from a Swedish firm after global furniture giant Ikea, which wants to set up shop in the country.
According to a senior commerce and industry ministry official, H&M has sought to enter India with an investment of euro 100 million (R720 crore). The company proposes to open 50 stores in India. Sources said the Swedish retail arm in India will be known as ?H&M Retail India? even though the proposed private limited company is yet to be incorporated.
Sources indicated that the two Sweden-based H&M Group companies ? Hennes & Mauritz GBC AB (99%) and H&M Mauritz International AB (1%) ? will hold stakes in the Indian operations and the company is said to have applied for permission to sell across nine product categories.
In its application, H&M has clarified that it will comply with the investment rules laid down for single-brand retailing including the mandatory 30% local sourcing norm. It said complying with the sourcing norm ?would not be tough?, said the official quoted above. The retailer has also added that it already sources, goods more than $250 million from India during 2012.
?We will start with a few stores and we will see if everything (goes) as we hope, then we will expand heavily from there,? H&M chief executive Karl-Johan Persson had said during his recent visit to India.
